We have been going through a tough time in this country, with the rising cost of gas, groceries, and so much more due to inflation. Keeping up with these increasing prices can feel incredibly frustrating, but there might be at least one light at the end of the tunnel that will help. Health insurance companies will be sending out rebate checks to millions of Americans. Find out why, and how much you can expect to see from your health insurance company.
The medical loss ratio provision requires insurance companies that cover individuals and small businesses to spend at least 80% of their premium income on healthcare claims and quality improvement. That means only 20% can be spent on administration and marketing expenses, or kept for profit. When private insurance companies don’t meet this standard, they are required to issue refunds to policyholders.
The rebates are calculated based on a three-year average, meaning this year’s rebates will be calculated based on the figures from the years 2019, 2020, and 2021. This year, insurance companies will be distributing an aggregate total of $1 billion to customers, down from the $2 billion issued in 2021, and a record $2.5 billion in 2020.
“In the last couple of years we’ve seen some really large rebates — twice the size of this year’s amount,” said Cynthia Cox, a vice president at the Kaiser Family Foundation and director of its Affordable Care Act program. “But I’d say $1 billion is still significant.”
How Much Can You Expect To See?
Of the $1 billion in rebates going out, the majority (an estimated $603 million), will generally go to people with a health plan through the public exchange. The refunds are expected to average $141 per participant in plans through the marketplace, $155 for those in plans through small employers, and $78 for enrollees in large-group plans. However, the rebate amount can vary widely, depending on your location and insurer.
If you’re wondering when you will see your check, get ready, because over eight million Americans can expect a rebate in the coming weeks.